Derby City Council is set to formally write off a £200,000 loan outstanding from QUAD since 2010. The Council recognises that the most successful cities have a vibrant cultural base, and cultural organisations like QUAD play an important role in place making and regeneration. The decision to write off this loan aims to support the longer term sustainability of one of Derby’s key cultural institutions, and recognises the major capital works carried out by them alongside the significant reduction in Council grant funding in the intervening period.
Culture has a very real role as an economic draw, creating an attractive destination for visitors, businesses and current and future residents. QUAD opened in 2008 and was an integral part of the master plan for city centre regeneration, bringing an essential cultural dimension and revitalising an important city centre development site. QUAD celebrated its tenth birthday last year having made a significant contribution to the cultural life of the city, with positive economic and social impacts. In the last financial year QUAD reached 452,370 people through their programme, including over 3,000 school children, and achieved an estimated economic impact for Derby of £6.2m.
The loan dates back to the financing of the £11.4m QUAD capital build project. Whilst this was a DCC project, and the building remains in the ownership of DCC, £500,000 of the fundraising was assigned to QUAD to raise through sponsorship and grant giving trusts. QUAD successfully secured £250,000 of the target with the liability for the shortfall transferred to them in the form of a loan agreement in 2008. An initial repayment of £50,000 was made, but subsequent repayments were frozen whilst outstanding building issues were resolved
Within the decision to write off the outstanding £200,000 loan, it has been recognised that QUAD has undertaken significant capital improvements to the building which is a council asset. Funded by internal budgets and external fundraising, additional work completed has a total value of £349,962. The work has improved commercial options on the ground floor and updated building management systems to increase efficiencies and significantly reduce costs for energy and water usage.
In the intervening period, to meet Council budget saving requirements, grant funding to QUAD has been reducing year on year. In 2010 QUAD received a grant from the Council of £373, 852, this being the funding requirement defined within the original business planning for the organisation. This year the grant will be £75,000, meaning QUAD have absorbed a grant reduction of almost £300,000. This has required QUAD to work in different ways to meet the financial challenge which has been a commendable performance on their part, enabling them to remain financially viable. During this period QUAD has continued to deliver a diverse programme of art and film for Derby, alongside specialist programmes supporting the most vulnerable in our communities. They have also simultaneously increased the number of people engaging with their programme and their economic impact for Derby.
Adam Buss, QUAD Chief Executive said:
“Writing off the £200,000 loan has the benefit of increasing QUAD’s fundraising potential. Removing the loan from OUr balance sheet improves our net assets position, and increases OUr unrestricted reserves. Both of these figures are scrutinised by grant funders as an indication of how solvent the applicant is. Improving QUAD’s balance sheet position will support our ability to raise funds from other sources and offset grant reductions from the Council.
“We are grateful to the Council for this decision that will support our longer term sustainability, and maintain work with partners to make Derby a great place to live, work and visit”.
Claire Davenport, Director of Leisure, Culture and Tourism said:
“QUAD is a vital part of our city’s cultural offer and it is important to be able to recognise the significant contributions they have made and to be able to support their longer term sustainability. We hope that it will allow QUAD to further develop its offer and attract even more visitors into our City and through its doors.”